Enterprise and Business Planning

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  • Enterprise and Business Planning
    • Business activities have a major impact on our lives - both as consumers and employees. Business is in every sector of the economy:
      • Secondary Sector: private enterprises provide us with a massive amount of consumer goods.
      • Primary Sector: providing the food we need, farming, supplying the power we use through mining or extracting oil.
      • Tertiary (service) Sector.
    • Why do people start their own business?
      • To gain a profit.
      • To turn a hobby or a pastime into a business.
      • To use redundancy money.
      • To be their own boss.
    • Needs and Wants
      • Needs = what people require to stay alive e.g. food, shelter.
      • Wants = what we desire, what we would like to have e.g. holidays, new clothes.
      • Needs and wants are not fixed.
    • What is an entrepreneur?
      • An entrepreneur is someone who starts and runs a business.
      • What are the key characteristics of an entrepreneur?
        • Being a risk taker.
        • Taking the initiative and being proactive.
        • Being an effective organiser.
        • Having creativity and being innovative.
        • Being hard working.
        • Being determined and having perseverance.
    • Identifying business opportunities.
      • Potential business opportunities exist when a market need exists.
      • Many new businesses are based on accessing customers through new market places e.g. online.
    • Developing a business plan.
      • The business plan makes clear the objectives of the business and how the business intends to achieve these objectives.
      • The overview or executive summary.
        • The overview should clearly describe the business idea. It should summarise the strategies that will be employed and how finance will be obtained. Sets out the overall aims and objectives of the business.
      • The marketing plan.
        • Based on both field and desk research. The market research carried out needs to establish if possible the size of the market, the needs of the customers and the level of competition.
      • The operations plan.
        • This will include details of where the business will be located, production methods and any equipment needed.
      • The human resources plan.
        • The number of employees and the skills, experience and qualifications they require will be outlines. Any management team will also be identified.
      • The financial plan.
        • A sales forecast indicating potential revenues.
        • A cash flow forecast for the first 12 months.
        • A profit and loss and balance forecast for the end of the first year.
        • A break even analysis.
      • What are the potential benefits of a business plan?
        • Presents the business owners with a clear set of instructions on how to run the business.
        • A comprehensive business plan will allow business owners to check progress against objectives, monitor cash flow and take action when objectives are not being achieved.
        • Business owners can clearly see when things are going wrong.
        • A business plan is needed  for potential investors or when seeking finance from banks.
      • What are the potential drawbacks of a business plan?
        • Market research costs time and money.
        • How do you predict what your income will be?How reliable is the market research data?


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